Daily Trades 20230106

What an epic week to start the year...

I was somewhat surprised to see the size of the upwards move today given the reason I described yesterday but still the growth for the whole week is less than 1%.

I was able to close many of my positions and was finally able to roll my QQQ to Feb.

Here are the positions I closed this week:

Here is my QQQ position:

As we can see, normally when I roll to another month then I sacrifice some of the premium I collect so that I can widen my strikes and reduce my risk. This time I waited with the roll another week and fortunately QQQ jumped to the price I was hoping that it would jump to. This allowed me to roll to Feb and only sacrifice a small portion of my premium. In 3 weeks time I can already roll to March, which will improve my position further.

I currently have $15.50 credit in this trade and I could close it at $3.24, which means that the $5000 investment has already produced $1226.

That's over 34% profit annualised with low risk and I still have 15 weeks to close the 12 months.

Interesting fact:

If you invest $1,000 and you generate 30% profit on it every single year and reinvest your profit then in 10 years you will turn your $1,000 into $13,786.

So ask yourself: are you better off going for risky trades or trading index funds with much lower risk and lower but still decent returns?

For those, who are new to my daily market comments, I place and document one trade a day with the objective of helping everyone learn how to trade options.

What's my trade for today?

#WDC (#WesternDigital) call option expiring in Feb. A few days ago I traded a naked put option against this stock as I felt that it was oversold but in 4 days it jumped nearly 21%. This allowed me to profit on my put trade and sell call option thinking that the stock should normalise around the current level or drop a bit lower.

The stats

Trade Type: Short Call

Strike: $42.5

Expiry: 17 Feb

Delta: -25

IV Rank: 46.6

Premium: $0.88

Cap Req: $376

Annualised Prof at Expiration: 203.%

IMPORTANT: Studying previous trades provide the opportunity to everyone to learn a great deal so I encourage you to click on the links below and digest the info.

Closed:

https://www.tycoonitos.com/community/market-comments/market-comments-20221003

Rolled:

https://www.tycoonitos.com/community/market-comments/market-comments-20220421

https://www.tycoonitos.com/community/market-comments/market-comments-20220520

Watch more detail here:

https://youtu.be/yeVEpl9jQlU

Let me know what you think.